Exxon posts 11 billion 2Q profits, but "is just passing on the cost"

[velociT]

I'm getting really tired of this BS.

If I was them, I'd be hiring more security.

 

[LumberJack5500]

Saw that at work today....I wish we could just get the truth about energy costs...too much smoke and mirrors

 

[wczorn]

Check this article on energy costs.
Ending Our Oil Addiction: Reality Check

Raymond Kraft
<http://www.familysecuritymatters.org/authors/id.71/author_detail.asp>

 

[Harvieux]

I'm getting really tired of this BS.

If I was them, I'd be hiring more security.

Would that be net profit or gross profit? Later!

 

[MrMopar]

I'm getting really tired of this BS.

If I was them, I'd be hiring more security.

And on the SAME DAY, gasoline prices shot up $0.30 per gallon here in town.

On the other hand, Exxon does get completely raped by the tax collector to the tune of a percentage far above what the average citizen pays in income taxes.

 

[velociT]

Would that be net profit or gross profit? Later!

The news story didnt say, but they did say that it is a record. No company of any kind has ever posted that much in a quarter.

 

[hendomatic]

Ripped from a website:

http://seekingalpha.com/article/63131-exxon-s-2007-tax-bill-30-billion

Over the last three years, Exxon Mobil has paid an average of $27 billion annually in taxes. That's $27,000,000,000 per year, a number so large it's hard to comprehend. Here's one way to put Exxon's taxes into perspective.
According to IRS data for 2004, the most recent year available:



Total number of tax returns: 130 million
Number of Tax Returns for the Bottom 50%: 65 million
Adjusted Gross Income for the Bottom 50%: $922 billion
Total Income Tax Paid by the Bottom 50%: $27.4 billion




Conclusion: In other words, just one corporation (Exxon Mobil) pays as much in taxes ($27 billion) annually as the entire bottom 50% of individual taxpayers, which is 65,000,000 people! Further, the tax rate for the bottom 50% is only 3% of adjusted gross income ($27.4 billion / $922 billion), and the tax rate for Exxon was 41% in 2006 ($67.4 billion in taxable income, $27.9 billion in taxes).

Profit vs. Profit margin. Your business plan and your shareholders are demanding a 10% profit margin for the year....


If you pay 50 billion bucks for a billion barrels of oil and make 55 billion bucks on the refined products, you have made 5 billion bucks or a 10% profit margin


When you have to pay 100 billion bucks for that same billion barrels of oil and still need to make 10% profit, you have to sell it for 110 billion dollars and make 10 billion in profit.

So now, you've just doubled your profit, but your profit margin is still 10%.

Pretty simple math.

Buy some stock and get in on the action.

 

[SootFoot]

What pisses me off about Exxon is that the vote to move the corp into alternative fuels areas failed at the stock holder meeting in Dallas in June. A lot of heavy weight share holders were backing the measure which would have begun movement by XOM into alternative fuels in addition to their mainline petroleum business. Word is a lot of the Rockefeller's wanted it to pass, and saw that the company needed to start positioning itself in alternative fuels development to hedge for the future. Short sighted if you ask me. But it did not pass. Short sighted if you ask me.

A pass of the measure might have been good news for lower cost bio-diesel. Or not. But it would have been a step in the right direction by XOM if you ask me.

 

[Croberts]

"the action" is snuffing out our economy. Hard to feel sorry about the amount of taxes they pay since in the past 5 years 55% of their profits have gone towards buying back stocks. To make record profits at the expense of our nation's workers and businesses is galling. People like yourself, hedge funds, mutual funds, overseas interests are what have caused the price of most commodities to skyrocket once the easy money made from the subprime real estate frenzy dried up. Those who have the money to play the markets screw the rest of us who actually work for our money and have watched our 401k's shrivel up. Oil companies should be using those profits to help insure a more stable energy picture for the coming generations, not buying back stock and $40 million dollar CEO bonuses.

 

[hendomatic]

"the action" is snuffing out our economy. Hard to feel sorry about the amount of taxes they pay since in the past 5 years 55% of their profits have gone towards buying back stocks. To make record profits at the expense of our nation's workers and businesses is galling. People like yourself, hedge funds, mutual funds, overseas interests are what have caused the price of most commodities to skyrocket once the easy money made from the subprime real estate frenzy dried up. Those who have the money to play the markets screw the rest of us who actually work for our money and have watched our 401k's shrivel up. Oil companies should be using those profits to help insure a more stable energy picture for the coming generations, not buying back stock and $40 million dollar CEO bonuses.

I have a 401k just like yourself. Its not shiveling up by any stretch. If you are keeping an eye on it, your's should not either.

I do not own a single share of any oil company unless its part of my 401k.

Nothing but more supply of refined products is going to drop the price at the pump for the next 5-10 years no matter what noble things anyone does. People need to realize this. None of what the current Congress is proposing is going to increase the supply of anything you can put in your present car.

Are you ready to just throw away your car any buy something else that runs on alternative energy? I would be willing to wager you will spend more in the long run than just paying what you're paying now for your fuel. You might feel better about it, but you'll spend more.

Even at $4.50 at the pump, fuel cost Americans less than it used to cost me in the UK in the 80's.

 

[phaser]

The federal government take is right off the top and then there are the federal and state road taxes tacked on to the pump price. If you ask me, it's the government that is raking in obscene profits.

"Exxon paid almost $3 in taxes ($32.361 billion) for every $1 in profits ($11.68 billion)"

So how much of that $4+ for a gallon of fuel is really federal and state government taxation?


http://www.istockanalyst.com/article/viewarticle+articleid_2459357&title=Exxon_Posts_Record.html

 

[Revolutionary_mind]

Time to go off the grid!

 

[Drivbiwire]

I'm getting really tired of this BS.

If I was them, I'd be hiring more security.

I'd really like to hear your explanation as to why Exxon's profits are excessive? Or is it that you are blind enough to believe every headline that CNN and the liberal press puts out there knowing full well people like you can't think beyond the headlines!

Let me dumb this down for you,

For every $1 in fuel they sold they (Exxon) made $.08436.

Apple improved their margins so that for every $1 in sales they made $.29000

So who's BS are you getting tired of Exxon Mobil or Apple who is raking the consumer over the coals in profits!

I wonder if CNN is going to call for a congressional investigation into Apples earnings...NOT!

Oh, and if you were wondering why Exxon stock dropped on these earnings reports, they missed their profit projections and the stock dropped on lower than expected earnings. You see People that actually understand economics realize that Exxon is not the rich company that liberals and Democrats try to make them out to be.

And if you have a 401k or any other form of mutual fund the odds are that meager %8.436 profit margin helped to reduce the blow to the dropping value of your retirement. Then again you probably think Obama is gonna give you a retirement for free along with healthcare...



DB

 

[MrMopar]

The federal government take is right off the top and then there are the federal and state road taxes tacked on to the pump price. If you ask me, it's the government that is raking in obscene profits.

And on top of that, the government is whining that they're not taking in enough money to the point that the highway trust fund is being depleted. Behind closed doors, congress and the senate are discussing RAISING the federal motor fuel tax. Yes, Nancy Pelosi is not just standing in the way of meaningful progress to drill for more oil - she wants to get her sticky fingers in the till a little bit more. That's just what this country needs in the middle of record high fuel prices - a motor fuel tax increase. That will go over well with the public.

 

[OilGuy]

What pisses me off about Exxon is that the vote to move the corp into alternative fuels areas failed at the stock holder meeting in Dallas in June.

At least you see XOM at least acknowledging the enviornment in their latest round of TV commercials

Did you buy a drink at lunch today and support beverage industry that makes over 2x the profit of oil companies? Or pop a pill from a drug company that makes over 3x the profit of oil companies?
http://api.org/statistics/earnings/upload/earnings_perspective.pdf

Actually, XOM has been active on the R&D side of fuel/energy saving technologies:
1) They developed a new tire liner material (ExxPro) that holds regular air much better than today's tires (and it will reduce tire weight too!)
2) They just developed a new technology that will allow Li ion batteries to be able to be used in a passenger vehicles on a mass scale (4x more energy dense than today's hybrid batteries)

I don't think the oil companies are the speculators that are responsible for the run up in crude pricing above what market ecomonmics would dictate. Economics don't support crude's price point today - the price is inflated by speculation.

Control what you can control - the car you drive, how you drive, how you use and consume energy

 

[Dimitri16V]

So ExxonMobil paid a lot of taxes. How much have I paid so far to ensure Exxon gets some lucrative oil contracts in Iraq ? Imagine if Exxon had managed to snatch Yukos out of Russian hands too. Their yearly profit would be in the trillion range.
now let me go and fill my tank with iPods ..

 

[Rod Bearing]

Even the White House' own special commission - along with experts from around the globe - says drilling for oil won't make a damn bit of difference near or far term, so how about you quit trotting that drilling solves everything propaganda out here?

 

[Got Bearings?]

Ripped from a website:

http://seekingalpha.com/article/63131-exxon-s-2007-tax-bill-30-billion


Profit vs. Profit margin. Your business plan and your shareholders are demanding a 10% profit margin for the year....


If you pay 50 billion bucks for a billion barrels of oil and make 55 billion bucks on the refined products, you have made 5 billion bucks or a 10% profit margin


When you have to pay 100 billion bucks for that same billion barrels of oil and still need to make 10% profit, you have to sell it for 110 billion dollars and make 10 billion in profit.

So now, you've just doubled your profit, but your profit margin is still 10%.

Pretty simple math.

Buy some stock and get in on the action.

Save your time. A lot of people here don't understand business, economics, profit margins, can't read financial statmentds, etc....

All they look at is the bottom line and cry about it. They could care less about anything else.

BTW... my 401k is still up this year despite the downturn of the stock market... most of that is due to my energy portfolio.

 

[DrewD]

Just talking about drilling for oil in the USA dropped the price of oil by 25 bucks/barrel. Just imagine what would happen if we actually did? The speculators that drove the price up would be in the hurt box.

 

[Revolutionary_mind]

Just talking about drilling for oil in the USA dropped the price of oil by 25 bucks/barrel. Just imagine what would happen if we actually did? The speculators that drove the price up would be in the hurt box.

Who are these speculators, why do they have clout, what drives them, they are very mysterious. Why does anyone listen to them, what makes them certified to "speculate". Do they get paid handsomely?

And more road taxes? Probably NOT to be used for anything meaningful, like our crumbling infrastructure. Anyone else see NO end to the wasteful spending?

 

[velociT]

I'd really like to hear your explanation as to why Exxon's profits are excessive? Or is it that you are blind enough to believe every headline that CNN and the liberal press puts out there knowing full well people like you can't think beyond the headlines!

You really need my explanation why their profits are so excessive?

Drive by a gas station, then drive by one a few years ago... see any difference?

And if you think that I believe the media... you have assumed a bit too much.

Let me dumb this down for you,

For every $1 in fuel they sold they (Exxon) made $.08436.

Apple improved their margins so that for every $1 in sales they made $.29000

Let me smart it up for you... maybe they got tired of only making .08436 a gallon. Thats why they've slowly quadrupled the price!

No matter how you slice it, their product is 50% more expensive than it was only two years ago.

Obviously they were able to stay in business when gas was $1 a gallon...

So who's BS are you getting tired of Exxon Mobil or Apple who is raking the consumer over the coals in profits!

I wonder if CNN is going to call for a congressional investigation into Apples earnings...NOT!

I'm glad you're comparing apples to airplanes.

When I have to buy an Ipod to get to work, your argument might start sounding a little closer to logical.

Theres a difference between buying something for leisure, and buying something you need.

 

[Got Bearings?]

You really need my explanation why their profits are so excessive?

Drive by a gas station, then drive by one a few years ago... see any difference?

A loaf of bread used to cost 5 cents. What's your point? The actual cost at the pump doesn't mean squat about profitability.

Let me smart it up for you... maybe they got tired of only making .08436 a gallon. Thats why they've slowly quadrupled the price!

No matter how you slice it, their product is 50% more expensive than it was only two years ago.

Obviously they were able to stay in business when gas was $1 a gallon...

Wow!! I don't even know how to respond to this. Let me dumb it back down for you so you can understand AND grasp it this time.

Oil companies DO NOT set the price of oil. Do you understand that? Oil is a commodity and price is set by supply and demand. Oil is a major raw material to make fuel and if the cost of oil goes up, the cost of fuel goes up. With me so far?

So when oil was $20 a barrel, they STILL made 8-10% profit margin. When the cost of oil goes to $150, they still make 8-10% profit margin. Their gross sales go up... but at the same time, their cost of production goes up... and that gets passed onto the consumers. But in the end, they still only make 8-10 cents for every dollar of fuel they sell.

What you aren't understanding is profit margin. When a company doesn't make more than 5-8%, you might as well shut down and invest the money because you will get a better return on the money elsewhere. Would you chose a savings account that earns 1% or one that earns 5%?

 

[Dimitri16V]

DBW probably burns thousands of jet fuel to deliver those ipods here from asia so Apple can make double the profit margin than XOM. sounds like a conspiracy to me

 

[aja8888]

What has really got me worried (and you should be too) is the fact that Exxon stated (essentially) in the earnings call that their crude production is lower than needed to maintain reserves. They spend about $52 million a day in exploration costs. And that they have future projects in the works to create about 440,000 BPD of crude (not enough). This is a disturbing trend.

The real big issue is not *Big Oil* (Exxon, BP, Shell, etc) and their profits (glad they actually have them), but their ABILITY to find new sources of crude oil. If Russia, Venezuela, Nigeria, Iran, Iraq and some others have their way in the near future, then NO oil companies will JV with them to get crude at a reasonable cost to be refined into US or European product.

What is going on here folks is that *Really Big Oil* (the nationalized countries that HAVE all the crude reserves), are doing all they can to squeeze US and British (and others) companies out of the picture. See what Russia did to BP this week. WHEN that happens, the folks on this board will not have to ***** about *Big Oil's* earnings as they won't have any. Now that crude is so valueable, the greedy nationalized countries are seeing $$ signs and don't care to share. But in the end (30 years from now?), they will go the route of Mexico and have a "failing" oil industry (google Cantrell field).

Cheers!

 

[Variant TDI]

No company of any kind has ever posted that much in a quarter.

You know how to stop this?

1) Give them less sales.

or

2) Split them back into 2 companies so their total sales, and resultant profit #'s are side by side, and under the radar, instead of stacked on top of each other, and an easy target.

Of course... Option 1 requires action from our responsible citizenry.
Option 2 does nothing but shuffle numbers, but it does address that irrelevant gross profit number, which seems to be what everyone is concerned about.

I think we should demand Congress give us option 2. It's less that we have to do, and we can continue blaming someone else!

 

[Rod Bearing]

What has really got me worried (and you should be too) is the fact that Exxon stated (essentially) in the earnings call that their crude production is lower than needed to maintain reserves.

The problem is, the supply is ARTIFICIALLY manipulated in order to keep prices on the rise.

 

[aja8888]

The problem is, the supply is ARTIFICIALLY manipulated in order to keep prices on the rise.

Which oil company (national or independent?) do you work for if you are so knowledgeable on supply tactics?

 

[Harvieux]

Why don't I hear you people b!tching at the bioD producers? And some of you think big oil is ruthless at their .08 cents per profit? Take a moment to think about the differences of production costs between refined oil and bioD. What's that? bioD producers get a $1 per gallon head start from the Gov't? Anyone care to predict the profit per for the bioD producers? (So much for comparing apples to airplanes, eh?) By golly, it's probably such a high number comparitively, you would think these fricken people should be behind bars. This is one reason I only use 2% and this 2% is used only because there is no better lubricity additive as proven by the Spicer test.

Drew hit the nail on the head when he correcty stated that by just the hint of drilling, oil dropped in price. The left side of the political spectrum keeps blurting out that drilling for more oil will not have an effect whatsoever. What would you think the world reaction would be if we prodded our lame arse congress into going balls out on drilling offshore, Anwar, and all the areas possible in the country? I'm talking not only drilling, I'm talking advertising it with media saturation, blogs, world economic meetings, etc. If done properly, this would have both a short term and long term effect. Short term by immediate drop in pump prices and long term by the eventual increase in production. During this path to increased production should be followed up with the most aggressive alternative fuel R&D push imaginable and yes, even with my conservative blood, it should include gov't funding for such and only because it is and will be a national security issue no matter which way you slice it. Later!

 

[Rod Bearing]

Crude prices fell what...15..20 dollars the last week or so?

Pump prices haven't matched them.

 

[Dimitri16V]

Now that crude is so valueable, the greedy nationalized countries are seeing $$ signs and don't care to share. But in the end (30 years from now?), they will go the route of Mexico and have a "failing" oil industry (google Cantrell field).

it's their oil , right ? if they choose to extract it themselves and not share it, it's their right. The days of installing puppet governments to loot others resources are over. US needs to spend less energy and pull away from fossil fuels , instead of trying to steal it.
"Greedy" nationalized companies ? Humor me, but how much Exxon was paying the Venezuelan government in royalties when they were pumping oil in "reasonable" cost ?

1 %

and you wonder why Chavez is called a "dictator" by our government and gets re-elected by his people.
But , allow our "American" oil companies to drill more domestically and what do you think they will do with the excess oil ?
Dump it in the domestic market or sell it to the Chinese ? we all know where the excess ULSD is going.